There is no legal obligation on an employer to set up or contribute to a pension scheme. However, you are legally required where there is no occupational pension scheme in place that you offer employees access to a Personal Retirement Savings Account [PRSA] scheme. If you do not offer either to your employee’s you are in breach of the law.
Most employers in the childcare sector do not offer Occupational Pension Schemes. However, a PRSA Scheme should be offered to all employees. It should be clause written into the contract of employment.
A PRSA Scheme only requires the employee to make a contribution to the scheme and not the employer.
Employers can request their bank or other relevant intermediaries to provide information to staff about a PRSA Scheme. In fact, some banks will come onsite and provide an information session for your staff team.
An employer must enter into a contract with a PRSA provider and is obliged to:
- notify 'excluded employees' that they have a right to contribute to a Standard PRSA; [an ‘excluded employee’ is a reference made by the Pension Authority where there is no occupational pension scheme in place]
- allow the PRSA provider or intermediary reasonable access to at their workplace;
- allow reasonable paid leave of absence, subject to work requirements, so that employees can set up a Standard PRSA;
- make deductions from payroll at the request of employees and remit these to the designated PRSA provider (employers cannot charge for deducting and remitting contributions);
- advise employees in writing (normally on their payslip) at least once a month of their total contribution including the employer's contribution, if any.
In order to comply with legislation employers should send an information note/letter to employees annually to remind them of their right to join a PRSA scheme. This document should have a sign off to include an option on whether they wish to join the scheme or to opt out of joining the scheme. This document should be filed on the employee personnel file. This shows the employer has been compliant with the legislation. If no employee chooses to join the PRSA Scheme then the employer is not required to take any further action. However, it is important that this option is offered annually to employees.
Further information is available on the Pensions Authority website http://www.pensionsauthority.ie/en/LifeCycle/Joining_a_plan/Employers_obligations_to_provide_access/
